On Friday evening, Moody’s cut Poland’s rating to A3 from A2, while at the same time revising the outlook from negative to stable.
The agency said large fiscal deficits had significantly increased Poland’s public debt burden and, together with rising borrowing costs, weakened the country’s debt-servicing indicators.
Moody’s said the downgrade reflected what it described as a “durable deterioration” in Poland’s fiscal strength since its previous review in September 2025.
Rafał Benecki, chief economist at ING Bank Śląski, told Poland's PAP news agency on Saturday that the decision had not come as a surprise to investors, either foreign or domestic.
“Markets have for some time been pricing in a deterioration in Poland’s budgetary position,” he said, adding that the trend could be seen in a range of market indicators.
Benecki pointed to the relatively low share of foreign investors in Poland, arguing that they tend to favour markets they consider relatively safe.
The economist argued that the country's fiscal deterioration was not a new phenomenon, but the result of a trend that had been developing for years.
“The deficit remains high regardless of whether the economy is performing well or poorly,” Benecki said, describing this as a worrying trend and a signal to politicians across the political spectrum.
He also linked the deterioration to what he called the “dismantling of various rule-of-law institutions” over the years, arguing that what he described as the “undermining of the state” was among the issues now reflected in Moody’s assessment.
At the same time, Benecki stressed that Poland’s economic fundamentals remained strong.
“Poland’s economy has enormous potential, but public finances need to be put right,” he said.
The government, meanwhile, has sought to play down the immediate significance of the downgrade. In an X post on Friday, Finance Minister Andrzej Domański said the government was treating Moody’s decision “seriously, but calmly.”
Domański also noted that Moody’s had previously assigned Poland the highest rating of the three major agencies. Following Friday’s downgrade, its assessment is now aligned with those of Fitch and S&P.
The Finance Ministry said the downgrade reflected Moody’s expectation of a sustained deterioration in Poland’s fiscal strength — underlining the central concern behind the decision: not the immediate state of the Polish economy, but the longer-term trajectory of its public finances.
(mo)
Source: PAP